FTSE 100 hits record high as miners rally

The Bank of England will meet later today, although policymakers are expected to leave interest rates at record low levels

By

Carla Mozee

March 16, 2017 9:13 a.m. GMT

Stocks in the UK charged up to record levels Thursday, with mining shares invigorated by a pullback in the dollar and a major investment in Anglo American, with the gains coming before the Bank of England releases its policy decision, MarketWatch reports.

The FTSE 100 jumped 0.7% to 7,420,49, on track to surpass its record closing high of 7,382.90 logged on March 1. The index on Wednesday finished up by 0.2%.

The index logged a record intra-day high of 7,423.20 Thursday as all sectors bounced up, led by the basic materials and oil and gas groups. Those sectors make up a more than 20% weighting on the British benchmark, according to FactSet data.

Anglo American topped the gauge as its shares jumped 7.7%. They surged 10% at the open after billionaire Anil Agarwal’s family trust, Volcan Investments, bought a 12% stake in the producer of iron ore, copper and other metals. The purchase makes Volcan the second-biggest investor in Anglo American.

Other metal producer stocks pushed higher alongside Anglo as the sector was also aided by a pullback in the dollar. The decline came after US Federal Reserve chairwoman Janet Yellen late Wednesday signaled the central bank will remain on a gradual pace of raising interest rates.

“Gold has been a clear winner from the US dollar’s sharp selloff following the Fed’s rate hike, as the precious metal halts its downtrend to post fresh 2-week highs,” said Accendo Markets analysts Mike van Dulken and Henry Croft in a note.

BoE rate call: The central bank is expected to leave the UK’s benchmark interest rate at a record low of 0.25%, although there’s been an rise in inflationary pressures. The BoE has been watching developments in the economy as the country moves closer to starting the process of leaving the European Union.

The pound traded at $1.2267, compared with $1.2291 late Wednesday in New York ahead of the BoE’s policy decision, due for release at 12 p.m. London time, or 8 a.m. Eastern Time.

Other movers: J Sainsbury shares shed 0.5% as the company said supermarket sales fell 0.1% in the nine weeks to March 11.